Todas las entradas para el mes de 15 mayo 2013

So Tesla Motors are starting to gain real momentum. They are making a profit and executing at or above projected sales and margins. They are becoming a cult must-have item amongst the star class and are forging ahead despite all the short bets placed against them.

How long can you exploit an opportunity before other “me-too” companies jump in and copy you? Good question, and one that has been explored to some depth in a recent article.

Well I find it amusing to think that a silicon valley startup is going to be chased by huge German and American multinationals. Nimble and agile are not typical words we use to describe huge companies after all!

Of course all of the big car manufacturers have plenty capital (human and financial) as well as fantastic research facilities, but since when has that meant anything in the world of innovation? Small, highly motivated teams, with a lot to gain and not much to lose, out to prove a point, and unshackled by vested interests and corporate bureaucracy, stand a much greater chance in my opinion.

So if the current big players aren’t going to step up to the plate short-term, where does that take us?

My vision of what will happen is something like the following:

1) Tesla Model S and X will soon become as in-demand as the early iphones (but without the ability to manufacture enough to meet needs)

2) Short term (until mid 2014) the big car companies will bring out their best attempts so far planned (the BMW i3, Renault Zoe, Chevy Volt, Cadillac ELR and a few others) but none will pack the punch, range or innovation of the Model S. And none will match the supercharger network, or offer the warranty or leasing that Tesla now offer. I’d be glad to be proved wrong here, but so far nothing suggests otherwise.

3) They won’t be able to come close to Tesla because their battery and vehicle tech won’t be innovative enough. Thanks to their first 10 years of work, Tesla hold the key patents to stop direct copies.

4) The technology required to beat Tesla will come from other startups in the field and they will be acquired by the big players. This will still take time to digest so until 2014 they won’t produce results.

5) By late 2014, and wth Tesla becoming a genuine threat to the big player’s top of the line vehicles, some credible alternatives will appear, but vested interests and internal conflicts in the large car manufacturers will slow them up.

6) In 2015 the chase will finally be on, but given the current rate of innovation displayed by Tesla, by this time a number of improvements will only serve to widen the gap.

It is true that the big players can manufacture large volumes much better than Tesla, but they will need the customer demand first. Comparing again with the iphone, others may be able to make more than Apple but that doesn’t mean they can sell them.

Ok, at lower prices sales would go up, but with their higher margins and prestige image Tesla could keep investing in manufacturing capacity.

7) So it might not be until 2016 or 2017 that serious alternatives to Tesla are on the market, with the whole performance, range, supercharger and warranty package.

What would Tesla look like by then and how will the market look?

a) Tesla will be producing maybe 100k to 200k vehicles a year at best so they won’t be near the 1.5M to 2M of Mercedes or BMW but they will be comparable to Lexus and Infinity.

b) Resale values of internal combustion cars will start to fall as consumer perceptions of electric being the future and internal combustion being the past grow (buying an internal combustion car will feel like buying an audio cassette, VHS recorder or film camera a few years after their digital alternatives began to dominate).

c) We will look to Tesla for innovation in automobiles the way we look to Apple or Google today (of course Apple are not right now living up to that role, but two years ago they certainly were).

In summary, its hard to see the big players doing anything substantial in the next 4 or 5 years to catch Tesla, and they’ll need the help of a few startups to do so.

Reading the pro-tesla seeking alpha site I ran into a very good article summarizing the 5 part trilogy of good news being fed to us from tesla s PR team via Elon Musk.
1) profitable q1
2) leasing model s
3) bullet-proof battery guarantee and support extra mile stuff
4) (speculation) supercharger network coast to coast in the US
5) (speculation) battery swapping!

This last one is a radical point as the cost of a swap station is huge (Better Place invested 1M for each of theirs), however the article points out:

Quote

Page 38 of Tesla’s most recent 10Q filed on May 10th, 2013. Newly added to the risk factors is this bullet;

“our capability to rapidly swap out the Model S battery pack and the development of specialized public facilities to perform such swapping, which do not currently exist but which we plan to introduce in the near future”

End quote

They are clearly thinking about it. If they do this it is seriously big…. The majority of humanity lives in cities and the majority of car owners do not have a private garage. Battery swapping is just about the best way to solve the recharging problem for these people in my opinion.

I just read a great article written with the investors point of view in mind, but with a good degree of clarity as to what things might be like in 2019 and 2020 if Tesla does as well as optimists like myself expect.

Essentially 2020 would be the year they sell 1M Teslas, doubling from 500,000 in 2019. The article looks into how this could happen and what it would require as far as growth year-on-year, and production capacity etc.

While the article is imagining just Tesla’s success, the facts are that if they were able to sell 500,000 cars there would be many other manufacturers jumping in and the market would be exploding. People would be buying regular internal combustion engines with about as much enthusiasm as you buy a VHS recorder today!

That day will come, its just a question of when.

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